Nintendo disappoints, baffles with first mobile app

When Nintendo announced plans to enter the mobile market earlier this year, the hope among gamers and investors was that it would come out swinging, bringing one of its powerful franchises to smartphones and tablets and making a big initial impact.

However, the company opted against using any of its popular characters and seems to be ignoring games altogether. Instead, it opted to sniff around the social networking space.

The company unveiled Miitomo—its entry into the mobile world—early Thursday at a press event in Japan. The app focuses not on Mario, Link, Donkey Kong or any of the other popular characters the company is known for, but instead on Miis, the virtual avatars users create for themselves on the Wii and Wii U platforms.

After (once again) creating a Mii, players are asked to answer a variety of questions such as, “What do you do on your day off?” Those answers are then shared with a circle of friends chosen by the user, much like Facebook (FB).

Nintendo president Tatsumi Kimishima said the company hopes the discussions could lead to deeper friendships.

“These ‘friendly communication starters’ have an advantage that even the people who are less willing to send messages can easily participate,” he said. “Another unique characteristic of Miitomo is that you may be able to find out unknown aspects about your friends or unexpected commonalities you share with your friend because Miitomo may pick up the topics that you usually do not discuss but would be willing to answer if asked. What we would like to realize is, through such communication, you will be able to deepen friendly relationships and have more people with whom you can play games.”

Analysts, though, say they’re not impressed with Miitomo—and can’t picture a use case where it will appeal to a broad audience.

“I think this is a disaster,” says Michael Pachter, managing director of equity research at Wedbush Securities. “This is not a game. It’s a social network concept. Facebook is a robust social network. I don’t need Nintendo to give me a cartoon version of myself that allows me to interact with my friends. …Facebook already dominates everybody who has social interactions. How the hell is Nintendo going to substitute for that? My friends who care know what I’m interested in—and the ones who don’t know aren’t interested.”

Beyond surprising analysts with the app’s theme, Nintendo also shocked analysts and investors with the announcement that it was delaying Miitomo’s release from this December until March 2016. Shares of the company’s stock fell 9% on news of the setback.

Despite Nintendo’s long history of missing initially announced ship dates, the delay was surprising since it was announced so late in the process. Up until recently, the company has stuck by its previously announced December schedule.

Miitomo is set to be the first of five mobile apps from Nintendo and DeNA. Kimishima said that despite the delay, the companies still anticipate all five to be out by March 2017.

While it’s possible Nintendo is simply holding back its big guns—like Mario—until it has a firm grasp of the mobile gaming space, the announcements about Miitomo have analysts wondering if the company actually does plan to use those characters or whether it will continue to keep them exclusive to its proprietary hardware platforms—especially with a new system, the NX, planned for release next year.

“I think a lot of the appeal of the concept that Nintendo was going to enter the mobile market was attributable to a misperception that Nintendo would take its library of content and move it onto the mobile platform,” says Pachter. “It doesn’t look like they have any intention of doing that.”